Britain’s consumer and housing-driven recovery, the fastest
among Group-of-Seven nations, risks losing steam unless export growth picks up,
economists said.
While the economy grew the fastest in more than two years in
the three months through September, the expansion was led by consumer spending,
construction and stock building. Net trade knocked 0.9 percentage point off
GDP, the most since the second quarter of 2011.
Bank of England Governor Mark Carney this week extolled the
strength of the economy’s revival, while acknowledging that weak growth in the
euro area may weigh on the export outlook and limit rebalancing of the economy.
Part of the domestic demand is linked to a revival in the housing market, which
has fueled concerns of a brewing bubble. Carney will address those risks at a
press conference in London today.
“The consumer is a big part of the economy, so it’s always
going to be an important component of growth but it shouldn’t be the sole
component,” said Carl Astorri, senior economic adviser to the EY ITEM Club. “To
get the stronger recovery that we’re forecasting for next year does rely on it
broadening out.”
The U.K. economy grew 0.8 percent in the last quarter, the
Office for National Statistics said yesterday. Investment in private-sector
dwellings climbed 5.9 percent, the most in two years. Consumer spending
increased for an eighth consecutive quarter. Exports, which account for about
one third of the economy, fell 2.4 percent, the most in more than two years.
(Source: Bloomberg)
